Human Resource Management (HRM)
Activities that a manager engages in to attract and retain employees and to ensure that they perform at a a high level and contribute to the accomplishment of organizational goals.
Strategic Human Resource Management
The process by which managers design the components of a HRM system to be consistent with each other, with other elements of organizational architecture, and with the organization's strategy and goals.
Components of a HRM System
-Recruitment and Selection
-Training and Development
-Performance Appraisal and Feedback
-Pay and Benefits
Recruitment and Selection
Used to attract and hire new employees who have the abilities, skills, and experiences that will help an organization achieve its goals.
Training and Development
Ensures that organizational members develop the skills and abilities that will enable them to perform their jobs effectively in the present and the future. Changes in technology and the environment require that organizational members learn new techniques and ways of working.
Performance Appraisal and Feedback
Provides managers with the information they need to make good human resources decisions about how to train, motivate, and reward organizational members.
Feedback from performance appraisal serves a development purpose for members of an organization.
Pay and Benefits
Rewarding high performing organizational members with raises, bonuses and recognition. Increases pay provides additional incentive. (Benefits, such as health insurance, reward membership in firm)
Steps that managers take to develop and maintain good working relationship with the labor unions that may represent their employee's interests.
Equal Employment Opportunity (EEO)
The equal right of all citizens to the opportunity to obtain employment regardless of their gender, age, race, country of origin, religion, or disabilities.
1964 - Title VII of the Civil Rights Act
Prohibits discrimination in employment decisions on the basis of race, religion, sex, color, or national origin; covers a wide range of employment decisions including hiring, firing, pay, promotion, and working conditions.
Discrimination (80% Rule of Thumb)
*look at formula
-If minority ratio is less than 80% of majority ratio, then there is adverse impacts.
-Adverse impact is prima facie evidence of discrimination
-Defense given adverse impact
The process that managers use to determine the relative qualifications of job applicants and their potential for performing well in a particular job.
Human Resource Planning (HRP)
Activities that managers engage in to forecast their current and future needs for human resources.
Estimate the qualifications and numbers of employees the firm will need given its goal strategies.
Using outside suppliers and manufacturers to produce goods and services. Using contract workers rather than hiring them.
-More flexible for the firm.
-Provides human capital at a lower cost
Problems with Outsourcing
-Loss of control over output
-Outsource contractors are not committed to the firm.
-Unions are against outsourcing because it has potential to eliminate member's job.
Identifying the tasks, duties and responsibilities that make up a job and the knowledge, skills, and abilities needed to perform the job.
-Should be done for each job in the organization.
Job Analysis Methods
-Observing what current workers do.
-Having workers and managers fill out questionaries
Looking outside the organization for people who have not worked with the firm previously.
-Newspapers advertisements, open houses, on-campus recruiting, employees referrals, and the Internet.
Advantages of External Recruiting
-Having access to a potential large applicant pool.
-Being able to attract people who have the skills, knowledge, and abilities an organization needs.
-Bringing in newcomers who may have a fresh approach to problems and be up to date on the latest technology.
Disadvantages of External Recruiting
-Relatively high costs.
-Candidates may lack knowledge about the inner working of the organization.
-May need to receive more training.
-Uncertainty concerning whether they will actually be good performers.
Benefits of Internal Recruiting
-Internal applicants are already familiar with the organization.
-Managers already know candidates.
-Can help boost levels of employee motivation and morale.
-Physical ability tests
-Helpful to screen out applicants who are lacking key qualifications.
-Determine which qualified applicants are more promising than others.
Interviews (two types)
-Structured interviews: managers ask each applicant the same job-related questions.
-Unstructured interviews, resemble normal conversations.
*Usually structured interviews are preferred; bias is possible in unstructured.
Ability tests assess the extent to which applicants possess the skills necessary for job performance. Managers must have some evidence that the tests are good predictors of performance
Physical ability tests
Measures of dexterity, strength, and stamina for physically demanding jobs. Measures must be job related to avoid discrimination.
Tests that measure an applicant's current ability to perform the job or part of the job such as requiring applicant to take typing speed test.
-Assessment centers are facilities where managerial candidates are assessed on job-related activities over a period of a few days.
Knowledgable sources who know the applicant's skills, abilities, and other personal characteristics.
Managers find out whether each applicant is qualified for the position and likely to be a good performer.
Teaching organizational members how to perform current jobs and helping them to acquire the knowledge and skills they need to be effective performers.
Building the knowledge and skills of organizational members to enable them to take on new responsibilities and challenges.
An assessment of which employees need training or development and what type of skills or knowledge they need to acquire.
Employees acquire skills in a classroom setting. Includes use of videos, role-playing, and simulations.
Training that takes place in the work setting as employees perform their job tasks.
Types of Development
-Varied Work Experiences
Varied Work Experiences
Top managers have need to and must build expertise in many areas. Employees identified as posible top managers are assigned different tasks and a variety of positions in an organization.
Tuition reimbursement is common for managers taking classes for MBA or job-related degrees. Long distance learning can also be used to reduce travel and other expense for managerial training.
The evaluation of employees' job performance and contributions to their organizations
The proces through which managers share performance appraisal information, give subordinates an opportunity to reflect on their own performance, and develop with subordinates plans for the future.
Assessing subordinates on personal characteristics that are relevant to job performance.
Disadvantages of trait appraisals
-Employees with a particular trait may choose not to use that particular trait on the job.
-Traits and performance are not always obviously linked.
-It is hard to give feedback on traits.
-Assess how workers perform their jobs, the actual actions and behaviors that exhibit on the job.
-Focuses on what a worker does right and wrong and provides good feedback for employees to change their behaviors.
Managers appraise performance by the results or the actual outcomes of work behaviors.
An appraisal conducted at a set time during the year and based on performance dimensions that were specified in advance.
Includes employees' base salaries, pay raises, and bonuses.
-Determined by characteristics of the organization and the job and levels of performance.
-Benefits are based on membership in an organization.
The relative position of an organization's incentives in comparison with those of other firm in the same industry employing similar kinds of workers.
The arrangement of jobs into categories based on their relative importance to the organization and its goals, level of skills, and other characteristics.
Benefits (Legally required and Voluntary)
Legally required: social security, workers' compensation, unemployment insurance.
-Voluntarly: health insurance, retirement, day care.